Eun Hee Kim v JM World Au Pty Ltd (in liq); Yeong Jeen Bak v JM World Au Pty Ltd (in liq)

2025/00374980; 2025/00430847

CORPORATIONS – the first respondent (JM World) was wound up on 22 June 2021 and the second respondent was appointed as liquidator – the appellant was one of two directors of JM World, the other being Mr Yeong Jeen Bak – JM World was wound up upon the application of Sustainable Design & Construction Pty Ltd (SDC), a building company which had performed substantial building work renovating a residential home owned by the appellant and Mr Bak (the Killara Property) – SDC contended that its contract in relation to that building work was with JM World and its status as a creditor to wind up JM World arose as a result of moneys not paid for that building work – JM World carried on business as a wholesale distributor of cosmetic products from a property which it owned in Roseville (the Roseville Property) – the Roseville Property was sold by contract dated 12 March 2021 which completed on 4 May 2021 – the net proceeds received were a little over $1 million – shortly thereafter, JM World purported to make three payments totalling approximately $980,000 to three overseas companies – the appellant also retained $50,000 of the settlement moneys for his own use, apparently as part repayment of moneys advanced by the appellant to JM World during COVID – there were two broad sets claims advanced by the respondents against the appellant and Mr Bak – the first were claims based on alleged breaches of statutory and fiduciary duties as directors in using JM World funds and incurring a further liability of JM World to SDC in respect of the building work on the Killara Property – the second set of claims concerned the alleged improper use and retention by Mr Bak of proceeds of sale from the sale of the Roseville Property – the appellant submitted that she did not breach her duties as a director as she left the running of JM World to Mr Bak and was not aware of the circumstances in which the building contract was entered into and alternatively, that she should be relieved of liability under ss 1312S and 1318 of the Corporations Act 2001 (Cth) by virtue of a traumatic accident she suffered in 2013 – the primary judge held that the appellant breached her duties as a director in causing or permitting JM World to enter into the building contract with SDC and allowing the improper use and retention of the Roseville Property settlement moneys by Mr Bak Mr Bak was also held to have breached his duties as director – the primary judge ordered the appellant and Mr Bak to pay compensation to JM World in remedy for the found breaches of duty – the primary judge further held that the appellant should not be relieved from liability under ss 1312S and 1318 of the Corporations Act nor could she establish a defence on the basis that she left the running of JM World to Mr Bak – the primary judge imposed an equitable charge over the Killara Property to secure repayment of the appellant and Mr Bak’s liability to JM World in respect of the building work claims – whether the primary judge erred in his finding as to the appellant’s breach of her duties as a director or failed to consider or give adequate reasons for that finding – whether the primary judge erred in refusing relief under ss 1312S and 1318 – whether the primary judge erred in awarding compound interest in favour of the respondents in relation to certain of their claims – whether the primary judge erred in his Honour’s assessment of compensation to be paid to JM World.

JM World Au Pty Ltd (in liq) v Kim [2025] NSWSC 995

JM World Au Pty Ltd (in liq) v Kim (No 2) [2025] NSWSC 1199